Revelations on US National Security Agency (NSA) surveillance programmes based on Edward Snowden’s cache of its data files caused “fundamental, irreversible changes in many countries,” wrote journalist Glen Greenwald, who brokered many of the disclosures (1). In 2013 Chancellor Angela Merkel of Germany and President Dilma Rousseff of Brazil took public stands against US privacy invasions — they had personally been victims — and the UN General Assembly voted unanimously to affirm online privacy as a human right. In June 2014, responding to the EU, the US Justice Department promised to send legislation to Congress that would grant European citizens many of the (inadequate) privacy protections accorded to US citizens.

But to grasp fully the importance of the Snowden affair, we must broaden our focus beyond the transgressions of an overbearing superstate and examine the impact of his revelations on the forces shaping the global political economy, structured around the US.

The NSA’s spying functions are an integral part of the apparatus of US military power. Since 2010 the director of the NSA has shaped US offensive operations through his concurrent appointment as head of the US military’s Cyber Command: both agencies are housed in the US Department of Defense. Admiral Michael S Rogers, the newly appointed head of both the NSA and the Cyber Command, confirmed the position when he explained to a New York Times reporter “how the United States might use cyberweapons ... as part of ordinary military operations, like cruise missiles and drones” (2).

This military apparatus operates within the more far-reaching context of US strategic alliances. Since 1948 the core of the US’s global signals intelligence programmes has been the UKUSA (United Kingdom-United States of America Agreement), in which the US is designated the “first party” and the NSA specifically “is recognised as the dominant party”. The UK, Canada, Australia and New Zealand are “second parties”. Each of these nations, besides assuming primary responsibility for signals intelligence collection in a region, and bolting itself to the US through joint facilities and joint operations, is granted access to pools of collected intelligence on terms set by the US (3).

These UKUSA countries — the “Five Eyes” nations — worked together for decades to wage a global cold war. The prime adversary was the old Soviet Union, but the growing success of anti-colonial, anti-imperialist and even anti-capitalist movements throughout Asia, Africa and Latin America inspired the US to develop a worldwide intelligence-gathering capability. The alliances that anchored this system went far beyond the “Five Eyes”. On the Soviet Union’s eastern and western flanks, Japan and Germany were among the treaty’s “third parties”. After the Snowden revelations, Angela Merkel requested that the US begin to share intelligence with Germany on terms comparable to those enjoyed by “second parties”; the Obama administration rebuffed her request.

Intelligence relationship with China

The number and identities of “third party” signatories has fluctuated, though all are accorded a lower level of access to intelligence. Iran, well placed to observe the Soviet Union’s southern territories, served until its 1979 revolution. The US then sought, and found, an alternative: Henry Kissinger’s secret April 1970 visit to the People’s Republic of China began a US intelligence relationship with China which became institutionalised. Xinjiang Province was convenient for eavesdropping on the USSR, and Deng Xiaoping, who masterminded the opening-up of China’s economy, permitted the CIA to construct two monitoring stations there, as long as they were run by Chinese technicians. These sites, operational by 1981, functioned at least into the mid-1990s.

The fact that no country beside the US possesses a pervasive, global spying system proves that the argument that “all countries do it” is specious. From satellites in the late 1950s to the Internet infrastructure today, this unparalleled US global surveillance complex has been continuously modernised. But since the fall of socialism in the early 1990s, it also has been repurposed. Its function is still to combat challengers, and would-be challengers, to a global political economy that is built around US interests. Today, however, the threats come from non-state actors, from less-developed countries intent on profit opportunities or on pursuing alternative developmental paths, and, crucially, from developed capitalist rivals.

To clarify this strategic shift we must also highlight an economic aspect of the US intelligence system that is linked to wider digital capitalism. An unaccountable industry of cyber-war and signals collection and processing has been built up over recent decades, and it includes Snowden’s former employer, Booz Allen Hamilton. Concerted and sustained privatisation has routinised “intelligence outsourcing”, transforming a long-time governmental function into an expansive joint effort by the state and corporate capital. As Snowden demonstrated, the US surveillance complex now penetrates to the heart of the US Internet industry.

There is good reason to think that Silicon Valley companies participated systematically, and mostly fraternally, in at least part of the top-secret NSA “Enduring Security Framework” (4). An expert on military communications applauded the “close ties of American companies ... to the US national security establishment” for facilitating “access to international traffic by the National Security Agency” in 1989 (5). This structural relationship remains. Though we may not assume that the corporate interests of most of the leading US Internet companies are fused, let alone identical, with those of the US government, there is little question that most of them have been indispensable collaborators. More than a year after Snowden’s disclosures began, the NSA director conceded “that the majority of corporations that had long given the agency its technological edge and global reach were still working with it” (6).

Distancing themselves from the spooks

After Snowden, however, Google, Facebook and others scrambled to distance themselves by professing outrage. Their protestations had little to do with political principle: US Internet corporations have built their businesses around mass spying for commercial purposes, on their own account and for their patrons, big advertisers and marketers.

Large-scale corporate data collection is not a natural or intrinsic net feature. It had to be enabled, by reworking the early Internet’s technical design. During the 1990s, when the World Wide Web was first being woven into social and cultural life, Internet companies and corporate advertisers overpowered public interest groups in lobbying the Clinton administration to minimise privacy restrictions, so that they could re-engineer the Web to enable commercial surveillance of users. Social networks, search engines, service providers and advertisers repulse even modest efforts at data protection, and continue to press for commercial surveillance to be pervasively integrated online, hence their promotion of cloud computing services. In this way a few thousand giant corporations have become able to capture information about the world’s population every hour of the day. As Evgeny Morozov explained, these companies’ profit strategies are utterly reliant on user data — it is that simple. WikiLeaks founder Julian Assange says they constitute “surveillance engines” (7).

These profit strategies are the basis of digital capitalism’s continuing development. The impulse to capture personal life electronically is strengthened by economic and political pressures. But mass surveillance also faces a dual vulnerability, which Snowden’s disclosures highlighted.

After the European Court of Justice ruled this May that individuals have a right to request the removal of search results linking to “inadequate, irrelevant or no longer relevant” personal data, Google received 41,000 “right-to-be-forgotten” requests in four days. Even more telling is that 87% of the 15,000 people polled in 15 countries by public relations firm Edelman Berland this June agreed that there should be laws “to prohibit businesses from buying and selling data without my opt-in consent”; the top threat to online privacy was thought to be “businesses using, trading or selling my personal data for financial gain without my knowledge or benefit” (8). The White House sought to prevent this view from becoming a political current by releasing a report recommending limits on the corporate use of data about customers; but the Obama administration determinedly agreed with big business that “big data will become an historic driver of progress” (9).

Rejection of US corporate and state dominance of digital capitalism went beyond poll data. For those who sought to fight back against US Internet companies, Snowden’s disclosures presented unanticipated opportunities. Some had been waiting a long time. An extraordinary 2014 “open letter to Eric Schmidt”, Google’s executive chairman, from the CEO of one of Europe’s biggest publishers shows this. The Axel Springer Group’s Matthias Dopfner charged that Google, which then had a 60% share of online advertising in Germany, aimed to become an unaccountable “digital superstate”. Dopfner explained that Europe remained a sclerotic force in this important domain, and sought to enlarge the manoeuvring room for German business interests (Frankfurter Allgemeine Zeitung, Feuilleton supplement, 17 April 2014).

That the global political economy remained locked in chronic stagnation only intensified corporate and state combat over prized sites of profit growth. On one side were the US Internet providers and corporate users, the praetorian guard of a US-centric digital capitalism. Microsoft deploys more than a million computers in over 40 countries to deliver its services from more than 100 data centres. Google’s Android and Apple’s iOS operating systems together accounted for a 96% share of the smartphones shipped globally during the second quarter of 2014. Europe’s performance remained lacklustre, as it has lost dominance in the mobile phone market and its Galileo project to create an independent global positioning system has stumbled. The range, dynamism and profitability of online-enabled digital capitalism were extraordinary not only in the industry, but across automobile manufacturing, medical services, education and finance (10). Which units of capital, headquartered in which jurisdictions, would appropriate the resulting profits?

‘Undermining confidence’

Snowden’s disclosures added an unpredictable element to this, as contingencies and challenges erupted around US cyber-dominance. Within weeks of the first stories, speculation increased that Snowden’s leaks could hurt the international sales of US technology companies. This May, the CEO of the US tech equipment company Cisco wrote to President Obama to warn that the NSA scandal was undermining “confidence in our industry and in the ability of technology companies to deliver products globally” (Financial Times, 19 May 2014).

Citing Snowden’s revelations, some states moved to alter economic policy, and this threatened US Internet businesses. Brazil and Germany proposed to allow only local providers to store their citizens’ data, and Russia already had legislation to this effect. The German government terminated its longstanding telecommunications service contract with Verizon, directing its business to Deutsche Telekom; two weeks later it expelled the head of US intelligence in Germany. A Christian Democratic leader suggested that German politicians and diplomats should use manual typewriters for sensitive documents. Brazil and the EU, which plan to construct a new submarine cable network as an alternative to reliance on US cables for intercontinental communications, granted the contract to Brazilian and Spanish companies. Brazil talked of abandoning Microsoft Outlook in favour of an email system using Brazilian data centres.

This economic policy backlash against US Internet capital has not abated. Germany banned the Uber taxi-sharing smartphone app in September. In China, the government is trying harder to promote national corporate champions by calling US Internet equipment and services a security threat, and by leaning on nationally-based companies to stop buying them.

US Internet companies went on a public relations offensive, and also raced to reorganise their overseas operations, to reassure worried foreign customers that they were complying with local data protection measures. IBM committed over a billion dollars to building additional data centres overseas, hoping to ease customer fears that their data was not safe from the US government’s surveillance. But then the US authorities demanded that Microsoft hand over emails stored on its servers in Ireland, and everybody was frightened again.

The US government still aims to renew and augment the advantages of US Internet capital. The US Attorney General filed formal charges in May against five Chinese military officers for commercial cyber-espionage, with the “justification” that China was using flagrantly illegal competitive tactics. The Financial Times disclosed on 22 May that the US indictment had “struck a chord in German industry, where there is disquiet over the theft of intellectual property.” This might have been the effect for which US officials had hoped.

Why did the US choose that moment to act? US leaders have vilified China for its alleged cyber-attacks against American businesses for years, just as the US has placed its own traps and backdoors into routers and other equipment supplied by the Chinese company, Huawei. It is easy to see a political motive: in an election year, a Democratic administration was able to claim China was a predator, taking jobs from US workers through theft of intellectual property. Showcasing China’s transgressions subtly underlined that, among allies, the status quo of a US-centric digital capitalism remains the best alternative.

Heart of the matter

This is the heart of the matter. Snowden reportedly hoped that one effect of his whistleblowing would be to “provide the support needed to build a more equal Internet” (11). He hoped not only to ignite debate over privacy rights and surveillance, but also to influence an opaque — but fraught — controversy over the Internet’s unbalanced structure.

That structure has always favoured the US. There has been international opposition sporadically since the 1990s. It intensified between 2003 and 2005, at the World Summit on the Information Society, and again in 2012 at a multilateral meeting convened by the International Telecommunication Union. Snowden’s disclosures escalated this conflict over “global Internet governance” (12). Their result was to weaken “Washington’s ability to shape the debate about the Internet’s future,” concluded the Financial Times, quoting “a former senior US government official” as stating “The US has lost the moral authority to talk about a free and open Internet” (21 April 2014).

After Dilma Rousseff protested over NSA transgressions at the UN General Assembly in September 2013, Brazil announced that it would host an international meeting to review the US-centric institutional policies for the global Internet. NETmundial, the “Global Multistakeholder Meeting on the Future of Internet Governance” convened in São Paolo in April. This conference drew comments from 180 participants, including governments, companies, and civil society organisations.

A few weeks before NETmundial, the US pre-empted what might have been an attempt to overhaul the fundamentals of governance, by promising to relinquish its formal role in overseeing the Californian non-profit corporation that manages some of the Internet’s essential functions; though it imposed important conditions. The US-based Software and Information Industry Association welcomed the outcome: “The language on surveillance was measured ... this meeting provided no cover for those who favor inter-governmental, ie United Nations, control over the Internet” (13).

Geopolitical-economic conflicts and nascent realignments shaped the Sao Paolo meeting, its outcomes and its aftermath. Brazil deferred to the US, but Russia and Cuba did not agree to Netmundial’s final document, Russia claiming that US rhetoric about “Internet freedom” rang hollow. India unhappily declared that its assent would be contingent on additional consultations with its government. China charged — not inaccurately — that the US maintained a “cyber hegemony” (China Daily, 21 May 2014). Activist groups, notably the Just Net Coalition, recommitted themselves to taking back the Internet “from the alliance of global corporate interests and the US.” This perception now resonates internationally. The Group of 77 plus China, taking note of NETmundial, has called for “intergovernmental entities to discuss and review the use of information and communications technologies to ensure that they fully comply with international law” — and has demanded an end to extraterritorial mass surveillance (14).

There is a deepening structural conflict over the shape and mastery of digital capitalism. The disparate interests ranged against US corporate and state power have gained momentum, but the US is set on renewing its global dominance. Henry Kissinger, a stalwart US supremacist, wants Americans to ask: “What do we seek to prevent, no matter how it happens, and if necessary alone? What do we seek to achieve, even if not supported by any multilateral effort?” (15). But states, corporations and their adherents are not the only political actors, as Snowden has reminded us.

Dan Schiller

Dan Schiller is professor at the University of Illinois (Urbana-Champaign) and author of ‘Digital Capitalism: Networking the Global Market Systems’ (MIT Press, Cambridge, US, 2000)

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Original text in English

Dan Schiller is the author of Digital Depression: Information Technology and Economic Crisis, University of Illinois Press, Urbana, 2014

(1) Glenn Greenwald, No Place To Hide, Metropolitan Books, New York, 2014.

(3) See Jeffrey T Richelson and Desmond Ball, The Ties That Bind: Intelligence Cooperation Between the UKUSA Countries, Allen & Unwin, Boston and London, 1985; Jeffrey T Richelson, The U.S. Intelligence Community, Westview, Boulder, 2008; and Philippe Rivière, “How the United States spies on us all”, Le Monde diplomatique, English edition, January 1999.